Freelancing vs. Outsourcing vs. Crowdsourcing

Learn the pros & cons of Crowdsourcing, Freelancing, & Outsourcing When the need arises to hire additional help, you have several time-tested methods plus a newly emerging trend. If you've already made the decision to hire externally, it will be beneficial to understand the pros and cons of each option. Understanding each option will help you feel more comfortable with your candidates and could help you get better quality work. For example, let's assume your business needs a magazine ad designed. If you're in the position of most business owners, you're budget won't allow you to hire an advertising agency, but you don't have anyone in-house that knows the methodologies of an ad that sells. You still have three great options that can be stress free if you understand what you're getting into.

  • Freelance
  • Outsource
  • Crowdsource

Freelancers are individuals who are self-employed and work from their own office. Using a freelance directory, you can hire a freelancer from all over the world in as quick as a few days. The major benefit to hiring a freelancer is the same with any external option – this is a person with the skills you need that you can contract with on a temporary basis to tackle a specific project. You can hire and fire your freelancer quickly and without reason or fear.

There are some drawbacks with today's freelancing system. Primarily, hiring a freelancer can consume much more of your time than you would imagine. If you post your magazine ad project on a freelance directory, you could receive anywhere from 20 - 80 bids, each including a cover letter, initial cost, portfolio, and followed up with a personalized email. You could spend a whole day analyzing half the list. Even after you review portfolios and interview freelancers you have no guarantee your freelancer will design a quality ad or even finish at all. You have to realize their portfolio is their best work from their entire career. Depending on the final cost of your design, your freelancer may be uncooperative in giving your design much effort. If you spend any length of time hiring freelancers, you'll begin to see there's so much competition they'll tell you anything you want to hear, regardless of their intentions.

Outsourcing typically refers to subcontracting a large project to a company so that multiple people will work on it rather than an individual freelancer. The leading benefit is that if something were to happen to an individual working on your project, others within the company would be able to pick up the slack. There's usually standard working hours, better communication, and it's still a much cheaper alternative to hiring internally. Just like freelancing, you can hire and fire your labor force as you see fit. Outsourcing carries the benefit of a greater diversification of skills than one person could possess alone. The work can also be carried out more steadily giving your project a greater chance of being completed on time.

Outsourcing possesses many of the same shortcomings as freelancing. Selecting a provider is based on their portfolios and sales pitch, yet you have no guarantee on the quality of design they'll create for your advertisement. Even worse than freelancing, you typically pay first, further committing yourself to their design. Additionally, costs can quickly increase, deadlines can be missed, and they can drop you just as fast if their services are hired by a better paying company. Managing an outsourced project can be difficult because of the geographical distance, cultural nuances, and lack of face-to-face communication. Although it may not affect small businesses, the services being provided to you are also being provided to similar competitors. Your information can be leaked to a higher paying competitor.

Crowdsourcing is the latest option for businesses looking for external services, and it’s gaining popularity for very good reasons. It's derived from the benefits of freelancing and outsourcing, and done its best to weed out the side effects. To crowdsource a project, you pitch your need to a community of professionals, and those that are interested will come back with a submission of their concept. To crowdsource the design of a magazine advertisement, you simply visit a crowdsourcing community and answer a few questions about the design you want. This essentially turns your project into a contest. You set the prize amount (your budget) and deadline. Thousands of designers will see your project and decide if they want to participate based on several factors, mainly

  • Clarity of project explanation
  • If your project is within their design specialty
  • Prize amount

Usually, dozens of designers will participate by crafting a finished magazine advertisement for your organization and posting it in your project's display board. In just a week's time, you could have 30-80 finished magazine ads to select from.

Some of the many benefits include saving time and money while eliminating the risk. Since each design is finished and selected before your deadline, you'll never spend more than the prize amount you picked. Designer's can't charge for revisions or rack up hours. Crowdsourcing skips you past the time-consuming act of studying cover letters, bids, portfolios, and emails, and takes you straight to a portfolio of finished designs created specifically for your project. Instead of picking a designer, you get to pick your finished product.

For this process to work, you have to select the right crowdsourcing community. For advertisement design projects (magazine ads, postcards, logos, websites), visit a design community like Prova | Advertising. For technical projects, use Amazon's mturk, and for other needs, simply Google it.

To learn more about crowdsourcing, read How it Works, or visit our helpful blog at

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